Bitcoin Could Be At Risk Of A Deeper Bear If This Ratio Compresses, Says Glassnode
On-chain analytics agency Glassnode has revealed in a report how long-term Bitcoin liquidity has witnessed a pointy decline alongside the market downturn.
Bitcoin Long-Term Holder Liquidity Ratio Has Plunged Recently
In its newest weekly report, Glassnode has talked about how liquidity within the Bitcoin market has modified following the current downturn. Glassnode has gauged the “liquidity” utilizing the Realized Profit/Loss Ratio, an on-chain metric that measures the ratio between the revenue and loss that BTC buyers are realizing by their transactions.
Current demand momentum may be tracked utilizing a model of this indicator that particularly tracks the profitability of the short-term holders (STHs), buyers who bought their cash throughout the previous 155 days.
As the beneath chart exhibits, the STH Realized Profit/Loss Ratio was at comparatively high ranges earlier, however since early October, its worth has plummeted.
With a price of simply 0.07, the indicator is now sitting deep contained in the loss area, an indication that the current Bitcoin consumers have overwhelmingly been capitulating at a loss. “Such overwhelming loss dominance confirms that liquidity has evaporated, particularly after the heavy demand absorption seen in Q2–Q3 2025 as long-term holders elevated their spending,” defined the analytics agency.
The metric fell to comparable lows again in Q1 2022, however thus far, market weak spot hasn’t been as extended. The report famous that if the ratio continues to be depressed, market circumstances may mirror these from again then.
While short-term demand momentum has collapsed, the identical hasn’t been true for long-term liquidity, a minimum of not but. Long-term momentum may be measured utilizing the Realized Profit/Loss Ratio of the long-term holders (LTHs), representing the extra resolute part of the market (holding time better than 155 days).
From the above chart, it’s seen that the 7-day exponential shifting common (EMA) of the Bitcoin LTH Realized Profit/Loss Ratio has witnessed a pointy decline as BTC has crashed.
Despite the drop, nonetheless, the metric’s worth continues to be 408, implying LTHs are realizing, on common, a revenue that’s 408 occasions the loss. This signifies that the long-term liquidity continues to be wholesome in comparison with Q1 2022, and even the foremost backside formations from the present cycle.
Glassnode warned, nonetheless, “if liquidity continues to fade and this ratio compresses towards 10x or decrease, the chance of transitioning right into a deeper bear market turns into troublesome to disregard.”
It now stays to be seen how the LTH Realized Profit/Loss will change for Bitcoin within the close to future, and if liquidity will see an extra squeeze.
BTC Price
At the time of writing, Bitcoin is buying and selling round $90,600, down 1.3% over the previous week.
